Part one of our new blog series on the world of retail looks at how retail is changing as a whole, and how you can plan for your business to stay on the right side of these trends.
Retail has transformed itself over the past few years - it has had to.
The financial crash of 2008 rocked shopper confidence. Ecommerce has drawn people off the streets and on to websites. And social media has shifted the balance of power in the conversation between shops and their customers.
There's been plenty of speculation about the state of retail thanks to its high public profile - we interact with shops every day. But what are the facts about retail now and how are they likely to change in the near future?
Let's start by examining three of the forces affecting a retail business - space, communications and customer behaviour.
1. Your space
However you feel about pop-ups, it's no secret that they've changed the way many people shop. They're small, temporary and exciting - but rather than let that threaten you, why not borrow some of that appeal for yourself?
Pop-ups cash in on FOMO - because they're not around forever, people feel more urgency to go. In this way they become events as much as locations.
Another part of their appeal is their apparent authenticity. A recent report by The Great British High Street tells us:
"consumers historically have preferred uniquely local features and experiences rather than those that are contrived or formula-driven".
Instead of creating the same impression at multiple locations like a chain does, each pop-up has its own appeal. They remind us of our surroundings instead of imposing surroundings upon us, and give us the satisfaction of buying from a dedicated small-businessperson (regardless of how big the business actually is).
Traditional spaces also have the potential to fight back against high-street decline and draw people in with unique experiences. Digital innovation has allowed many retailers to make their physical spaces into destinations again by offering the kind of interaction that their websites can't. Audi City used digital experiences to create a showroom in a small inner-city space - the showroom improved on Audi's traditional sales by 60%, and half of buyers didn't even have a real test drive.
These trends show us how important it is to adapt your space to suit consumer preferences - and big names like Audi have shown that you can do this without selling out your brand promise.
2. The way you communicate
Social media has made consumers much more sceptical about what retailers tell them. But it has also presented another opportunity for shops to help their customers, by being available to answer questions and point them towards relevant information. This helps shoppers do their research and gain the confidence they need in order to buy from you.
This also shifts the focus in-store - customers who already know about your products don't need to be sold to. This frees in-store staff to introduce shoppers to those new experiences you're offering.
Relevance is more important than ever. While we appreciate convenience when we shop, we're also willing to go out of our way to a shop that understands us better. The Great British High Street report reminds us:
"it has been a long time since lack of transportation constrained citizens to a specific market town and its limited traders".
Keeping your communications relevant to your audience will enable you to draw shoppers in from miles around.
For online shoppers, lack of the personal touch is no longer an issue thanks to big data. What you know about your customers can give you a huge headstart on making them feel at home - not just calling them by their name but knowing when they're most likely to read emails, when they prefer to shop, and what they like to buy. It's no replacement for your friendly local shopkeeper but it's a pretty good online substitute.
Not only does technology make your communications more effective, it makes your staff's jobs easier too.
3. Your customers
We're bored by formula and seek out unique experiences - this explains the success of pop-ups and our willingness to travel for the right kind of shop.
This doesn't mean we don't appreciate convenience - but this must be translated into online shopping as well. It will come as no surprise that online spending is increasing and is expected to hit £221bn in the UK in 2016, but there are still retailers who neglect their online shopping experience. Shoppers list an easy-to-use website as the most significant attraction to a retailer after the products themselves. Bad UX is like a bad shop layout - it ruins any convenience you might have offered in the first place.
Attitudes to shopping change as we get older, from learning what we like and what we can afford in our early twenties to enjoying the browsing experience with our increased leisure time and disposable income in middle age.
These trends show that consumer behaviour is constantly changing, and small-scale experiments are likely to give you vital information on your customers as well as opportunities to innovate on a larger scale.
In the face of changing financial situations and consumer attitudes, business as usual only works for a short amount of time. By looking ahead and shaking things up - in your physical shops, communications and customer relations - you give yourself a good chance of success whatever the weather.
Our next post in the series, which will look at digital innovation in physical retail environments, is coming soon. Follow us on Twitter for updates.